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Recommended Hourly Rate: -
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Overview
The Freelance Hourly Rate Calculator helps you set a fair rate for your freelance work by ensuring that you cover your monthly expenses and desired profit, while also considering market conditions. This tool is especially useful for freelancers, gig workers, and independent contractors.
Explanation & Methodology
The calculator determines your recommended hourly rate using the formula:
Hourly Rate = (Total Monthly Expenses + Desired Profit) ÷ Billable Hours
Optionally, if you provide a tax or additional cost percentage, the calculated rate is increased by that percentage to cover extra costs.
Example Calculation
For instance, if you have:
- Monthly Expenses: €2,000
- Desired Profit: €1,000
- Billable Hours: 100
Base Hourly Rate = (2000 + 1000) ÷ 100 = €30 per hour.
If a tax/additional cost factor of 10% is applied, the adjusted hourly rate = €30 × 1.10 = €33 per hour.
Frequently Asked Questions
How is my hourly rate calculated?
Your hourly rate is determined by dividing your total monthly expenses plus your desired profit by the number of billable hours you plan to work. Optionally, a tax or additional cost factor can be applied.
Why should I include tax and additional costs?
Including tax and additional costs ensures that you cover all your expenses and maintain profitability after accounting for taxes and other incidental costs.
Can I adjust my inputs to see different scenarios?
Yes, simply change your expense, profit, or hours estimates and recalculate to see how your recommended rate changes.